As one of the top recruiters in the country, I always tell people to be honest about their backgrounds at all times. I think people who get into the habit of increasing their salaries do it only because they believe the hiring company, simply uses a formula when deciding what you pay and they're right. (It’s usually 5-15% higher than what the candidate was making at their previous employer). The better way to avoid inflating salaries is for both sides is to make sure expectations are set at the beginning of the interview process. What a candidate needs to do is be up-front with their salary requirements from the start. If they were making $40,000 at their last job, but believe they were underpaid, that needs to come out during the interview. They need to say, “ I’m making $40,000 at ABC company and I believe I’m underpaid, which is why I’m looking now.” "Someone with my background and experience should be making $65,000, according to my research and talking to many of my peers in the industry."It comes down to what you believe you are worth, not what you made at your last job.
Companies need to understand salary issues, when handing out offers. If the person is too expensive, the candidate needs to know that early on, so they can make a decision to go forward with the rest of the interviews. They need to make sure the candidate feels important and not make the salary offer an afterthought. They also need to understand that an offer shouldn't just be based on a 5-15% increase in salary but what the candidate is worth to the company and also understand why the candidate is asking for a specific salary, even if it's much higher than their last job. Remember, that might be why they're looking in the first place!
If both sides are open and up-front, salary embellishing would be less prominent. Tell the employer what you believe you are worth, and make sure they know, it has nothing to do with what they were making at their last job.
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